Singer's Grip On Songs Gets Shakier

By JEFF LEEDS

Published: May 5, 2005

Michael Jackson may have moved one step closer to losing his grip on his prized music-publishing catalogs.

The pop star has long financed his lifestyle with an estimated $270 million in loans provided by Bank of America and secured by his catalogs, which include copyrights to songs by the Beatles, along with his own hits. But the bank has now sold the loans to a New York private equity fund, Fortress Investment Group, people close to Mr. Jackson said.

If Mr. Jackson defaults on the loans, the sale puts Fortress in a position to seize control of Mijac, the company that controls the copyrights to Mr. Jackson's songs, these people said. About $70 million of Mr. Jackson's loans are backed by the Mijac copyrights, the people said. They have expressed concern that Fortress would be quicker to take control of the assets.

Bank of America had until recently appeared content to work out deals with Mr. Jackson and was uninterested in owning or running his publishing business, the people said.

The purchase by Fortress comes as Mr. Jackson has been under pressure to sell at least part of his half-stake in Sony/ATV Music, which controls the copyrights to the Beatles' songs, to clear up his balance sheet. Mr. Jackson had taken out loans backed by this stake, and his share of income from the venture was earmarked to cover those loan payments, which are guaranteed by Sony, the people said.

The people briefed on Mr. Jackson's financial picture have described his relationship with the bank as generally amicable. But these people said a series of moves by Ron Burkle, the entrepreneur who has recently been advising Mr. Jackson on his finances, had irritated the bankers.